Exhibit 19-3 -Refer to Exhibit 19-3. If Price Increases from $2.50 to Increases

question 153

Multiple Choice

Exhibit 19-3

-Refer to Exhibit 19-3. If price increases from $2.50 to $3.50, total revenue along the demand curve

• A)increases to $67.50.
• B)increases to $87.50.
• C)remains at $87.50.
• D)decreases to $67.50.

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Definitions:

Coupon Rate

The annual interest yield on a bond, displayed as a percentage of its principal value.

Tax Rate

The scale at which the government levies taxes on the financial gains of individuals or corporations.

Face Value

The nominal value printed on a bond or other financial instrument; it is the amount paid to the holder at maturity, though the market value can differ.

Weighted Average Cost of Capital (WACC)

The rate that a company is expected to pay on average to all its security holders to finance its assets, a key factor in capital budgeting decisions.